Vallourec: Morgan Stanley downgrades to sell
(CercleFinance.com) - As part of a sector report on oil service companies, Morgan Stanley has downgraded its rating on the French share Vallourec, now adopting a sell rating "underperform" against a "weight in line" rating previously.
At issue are the group's balance sheet risk. Even so, the broker has nudged up its target price for the share from 2.8 euros to 3 euros.
At the sector level, Morgan Stanley believes that the worst is now over, but also that the recovery will be more moderate than usual.
Admittedly, experts recognise that highly indebted companies such as vallourec are also among those with the highest potential for recovery. However, as the sector's recovery promises to be complicated, the balance sheet risk will be heavier, which explains why Vallourec has downgraded both Vallourec and PGS.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
At issue are the group's balance sheet risk. Even so, the broker has nudged up its target price for the share from 2.8 euros to 3 euros.
At the sector level, Morgan Stanley believes that the worst is now over, but also that the recovery will be more moderate than usual.
Admittedly, experts recognise that highly indebted companies such as vallourec are also among those with the highest potential for recovery. However, as the sector's recovery promises to be complicated, the balance sheet risk will be heavier, which explains why Vallourec has downgraded both Vallourec and PGS.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.